Company Overview

Dhanlaxmi Fabrics Limited (Scrip Code: 521151) filed its 34th Annual Report for FY25-26, disclosing significant financial deterioration despite substantial revenue growth. The company reported a consolidated net loss of ₹330.35 lakhs compared to a profit of ₹8.95 lakhs in FY24-25, representing a severe downturn in profitability.

Financial Performance

Consolidated Results (₹ Lakhs):

  • Revenue from Operations: ₹2,438.97 (FY26) vs ₹1,311.20 (FY25) - 86% increase
  • Total Revenue: ₹2,581.15 (FY26) vs ₹1,494.05 (FY25) - 73% increase
  • Profit/(Loss) after Tax: (₹330.35) (FY26) vs ₹8.95 (FY25)
  • Basic EPS: ₹(3.85) vs ₹0.10

Standalone Performance:

  • Revenue from Operations: ₹1,900.82 (FY26) vs ₹928.39 (FY25)
  • PAT: (₹295.92) (FY26) vs ₹8.75 (FY25)

Key Operational Developments

The company disposed of its subsidiary DFL Fabrics Pvt Ltd during the year, recognizing a net gain of ₹11.98 lakhs from the disposal. Subsidiary performance was mixed: Dhanesh Fabrics Pvt Ltd reported PAT of ₹5.77 lakhs, while Western Chlorides & Chemicals Pvt Ltd reported a loss of ₹192.53 lakhs.

Asset and Liability Position

Assets (as of 31/03/2026):

  • Inventories: ₹333.22 lakhs
  • Cash & Cash Equivalents: ₹63.08 lakhs
  • Other Current Assets: ₹964.59 lakhs
  • Investments in listed equity/mutual funds: ₹278.58 lakhs market value

Liabilities:

  • Short Term Borrowings: ₹30.00 lakhs
  • Other Current Liabilities: ₹20.09 lakhs
  • Deferred Tax Liabilities (Net): ₹79.48 lakhs

Corporate Governance & Compliance

The Board comprised six directors with stable composition. The company confirmed compliance with SEBI LODR Regulations and all mandatory corporate governance requirements. The 34th AGM is scheduled for September 24, 2026, to be held virtually via VC/OAVM.

Related Party Transactions

Transactions during the year were at arm's length and in ordinary course of business, including:

  • Sale/purchase of fabric/yarn with Dhanesh Fabrics: ₹267.25 lakhs/₹398.87 lakhs
  • Lease rent paid to Western Chlorides: ₹36.00 lakhs
  • Interest received from Promtech Impex: ₹31.04 lakhs
  • Loan repayment from Promtech Impex: ₹340.00 lakhs

Audit and Compliance Matters

Statutory Auditors M/S. R H A D & CO issued a clean report but emphasized matters including Capital Work in Progress of ₹1,404.51 lakhs held for over 12 months without impairment provision, and sundry debtors overdue for more than six months. Secretarial Audit Report noted observations on internal financial controls over statutory dues.

Contingencies and Legal Matters

The company has disputed income tax assessments and penalties under appeal with CIT (Appeals) for AY 2010-11 to 2014-15, involving approximately ₹6.99 Crores. Additionally, contingent liabilities of ₹528.96 lakhs exist for disputed bills from Shri Dhairyasheel Mane Textile Park.

Financial Ratios Deterioration

Key ratios showed significant decline:

  • Return on Equity: -7% vs 0% (FY25)
  • Return on Capital Employed: -8% vs 2% (FY25)
  • Current Ratio: 4.73 vs 5.88 (FY25)
  • Debt Service Coverage Ratio: (4.25) vs (6.30) (FY25)

Capital Structure

Paid-up Equity Share Capital remained unchanged at ₹858.11 lakhs (85,81,100 equity shares). Promoter holding stood at 74.91% with 98.13% shares in demat form. No dividend was recommended for FY26.